Correlation Between Ethereum and SwissBorg

Can any of the company-specific risk be diversified away by investing in both Ethereum and SwissBorg at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ethereum and SwissBorg into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ethereum and SwissBorg, you can compare the effects of market volatilities on Ethereum and SwissBorg and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ethereum with a short position of SwissBorg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and SwissBorg.

Diversification Opportunities for Ethereum and SwissBorg

0.97

Correlation Coefficient

Ethereum  SwissBorg

Almost no diversification

The 3 months correlation between Ethereum and SwissBorg is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum and SwissBorg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SwissBorg and Ethereum is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ethereum are associated (or correlated) with SwissBorg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SwissBorg has no effect on the direction of Ethereum i.e., Ethereum and SwissBorg go up and down completely randomly.

Pair Corralation between Ethereum and SwissBorg

Assuming the 90 days trading horizon Ethereum is expected to under-perform the SwissBorg. But the crypto coin apears to be less risky and, when comparing its historical volatility, Ethereum is 1.09 times less risky than SwissBorg. The crypto coin trades about -0.21 of its potential returns per unit of risk. The SwissBorg is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  21.00  in SwissBorg on January 6, 2025 and sell it today you would lose (1.00) from holding SwissBorg or give up 4.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Ethereum  vs.  SwissBorg

Ethereum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ethereum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's technical indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for Ethereum shareholders.

SwissBorg

Risk-Adjusted Performance

Very Weak

Over the last 90 days SwissBorg has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for SwissBorg shareholders.

Pair Trading with Ethereum and SwissBorg

The main advantage of trading using opposite Ethereum and SwissBorg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum position performs unexpectedly, SwissBorg can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SwissBorg will offset losses from the drop in SwissBorg's long position.

The idea behind Ethereum and SwissBorg pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..